
Traditionally,
it was suggested that trade associations should admit all qualified
applicants, provide due process before rejecting an applicant or
expelling a member, and offer certain membership benefits to
non-members. These suggestions, which were designed to minimize the risk
of antitrust violations, were based upon the assumption that
associations controlled essential or unique resources that could not be
denied to an applicant without foreclosing competition. This traditional
protocol, however, changed with the Supreme Court’s decision in Northwest
Wholesale Stationers, Inc v Pacific Stationery & Printing Co,
472 US 284 (1985). In Northwest Wholesale Stationers, the Court
indicated that antitrust laws no longer assumed that association
membership conferred a competitive advantage. Under the current
analysis, the courts will employ a rule of reason and will be applied
when evaluating the challenged activity or restriction, unless the
challenged activity or restriction is unambiguously anti-competitive, or
the association has market power or control of an essential facility
within the trade or industry.
Specific
membership criteria has historically been evaluated on whether there was
an intent to limit competition or disadvantage a potential member. Under
this analysis, courts struck down criteria that was more restrictive
than necessary, or unrelated to a legitimate purpose of the association.
Since the Supreme Court’s decision in Northwest Wholesale
Stationers, however, the analysis has shifted to determine whether
the exclusion of a potential member from an association would have an
anticompetitive effect on the market. In the absence of a per se
offense, such anti-competitive effect requires that the association
possess market power or exclusive access to an element necessary for
effective competition.
The issue
of whether an association must provide benefits to non-members is
governed by the "market power" analysis set forth in Northwest
Wholesale Stationers. If the benefits at issue are essential to
competition, then there is a greater chance it will be required to
provide access to the benefits to non-members. For example, an
association that provides certification of industry products must not
discriminate between products of members and non-members. Similarly, an
association may not exclude a non-member from an association-sponsored
trade show where that exclusion would restrict the right or ability of
the non-member to effectively compete in the industry. It should be
noted, however, that an association may impose reasonable fees for
services provided to non-members.